Risk management is as important as lyft stock selection. Without it, even the best strategies fail during downturns.
**Principles of risk management**
– Reduce volatility.
– Adjust with age and goals.
– Position sizing: never risk too much on one trade.
– Stop-loss orders: automatic sell triggers.
**Examples of diversification**
– Technology: Apple, Microsoft, Google.
– Healthcare: Pfizer, Johnson & Johnson, Roche.
– Consumer goods: Coca-Cola, Nestlé, Procter & Gamble.
– Energy: ExxonMobil, Chevron, BP.
**Psychological aspects**
– Discipline prevents panic selling.
– Avoid chasing hype.
– Adjust when life circumstances change.
**Conclusion**
Risk management is the difference between success and failure. By diversifying, allocating wisely, and setting rules, investors achieve long-term goals.
